‘Show me the money!’ A brief history of American spending power

The history of luxury – from Roman villas to Russian oligarchs – is explored in a new book written by Peter McNeil and Giorgio Riello. A story of extravagance, excess and indulgence, Luxury: A Rich History considers how opulence has developed from antiquity to the 21st century

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Here, writing for History Extra, Riello focuses on the history of American wealth, revealing how American fortunes bankrolled the 19th-century British aristocracy…

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While Americans were good at making money, they seemed to need Europeans to spend it. The United States emerged as the land of plenty in the 17th century, but its puritanical heritage made Americans resilient to luxury and whimsical spending. George Washington embodied the ‘homespun ideology’ of the newly independent nation when, on becoming the first president of the United States of America, he wore simple woollen clothing spun from local wool rather than silk imported from Europe.

Yet, such a disdain for luxury in American culture was at odds with the fact that over the course of the 19th century the US became the wealthiest nation on earth. The word ‘millionaire’ was coined in France, but came to be used in North America in 1843 upon the death of the New York tobacco magnate Pierre Lorillard, who left an enormous fortune. Later on, America invented the billionaire: in 1982 there were 13 billionaires in the US. The figures have risen dramatically since then: by 2014, Russia had 111 billionaires and China had 152, though the US still topped the list with 492.

It was in the last quarter of the 19th century that the US emerged as a land not just of fabulous wealth, but also of fabulously wealthy people. This is the period often referred to as the ‘American gilded age’. The term refers to the novel by Mark Twain and Charles Dudley Warner entitled The Gilded Age: A Tale of Today (1873), a satire of greed and corruption in the post-Civil War period. Wealth from new industries, railroads and finance created enormous fortunes at a time when taxation and labour costs were low.

'Gilded Age' - by 'Gilded Age' - by Mark Twain, written in 1873. A page of his  handwritten manuscript. MT: American humanist, satirist, lecturer and writer, 30 November 1835 –21  April 1910.  (Photo by Culture Club/Getty Images)

A page of Mark Twain’s handwritten manuscript of ‘The Gilded Age: A Tale of Today’ (1873). (Photo by Culture Club/Getty Images)

Yet, new money was not always welcome in ‘democratic’ North America. The newly rich felt shunned by the most important families of New England, the many Dutch-origin dynasties such as the Astors, the Stuyvesants and the like. As they were rejected by older members of a snobbish society such as that of Manhattan (with its ‘400’ list of people ‘worthy’ of being received), the so-called plutocrats – a word coined in the 17th century but only used widely in late 19th-century America – tried to find a place in high society. Europe – and Britain in particular – seemed to provide the solution.

There was no lack of rich American heiresses who wished to marry into the European aristocracy in order to ‘buy’ cachet for their families back home. These were known as ‘dollar princesses’. The term came from a popular song ‘we are the dollar princesses’. The British aristocracy, straying far from the exclusivity for which it prided itself, did not mind marrying into this American wealth. The fictional Lady Grantham from the television series Downton Abbey is now one of the world’s most famous ‘dollar princesses’. She embodies those young American ladies whose fathers had become immensely rich through business after the American Civil War.

They included such famous figures as Consuelo Vanderbilt, who married the Duke of Marlborough, becoming the duchess, and lived at Blenheim Palace until her divorce; Mary Leiter, daughter of the founders of Marshall Field’s stores (she became first Lady Curzon and later vicereine of India); and Anna Gould (who married – and later divorced – the French aristocrat Boniface ‘Boni’ de Castellane). ‘May’ Goelet, daughter of a real estate tycoon, married the 8th Duke of Roxburghe in 1903 and brought a dowry of $20 million to Floors Castle, her husband’s hereditary seat, which she proceeded to refurnish in the fashionable ‘goût Ritz’ style.

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Mary Leiter (Lady Curzon) with her husband, George Curzon. (Granger, NYC/Alamy Stock Photo)

The arrival of a number of wealthy American heiresses coincided with a series of challenges to the British aristocracy: between 1890 and 1910, legislative and social changes occurred, including reform of local government, the access of industrialists to the peerage, the Liberal attack on the House of Lords, the introduction of death duties and the threat of land tax. The Asquith Budget of 1912 proposed to increase income tax and estate duties, much to the fury of the House of Lords; it was at first defeated, but later passed following tumult.

It was American money that enabled the ancient piles of the British nobility to be restored and elaborate new residences to be erected. All this building, rebuilding and refitting did not come cheap, however. Indeed, they required resources then held only by wealthy Americans. Clare Boothe Luce, a wealthy ambassadress and society figure, formerly married to Henry R Luce, chairman of Time-Life publishing house, once said: “In America, money is a thing less valued in the spending than in the earning. It is less a symbol of luxury than of ‘success’, less of corruption than of virtue.” The famed cosmetics entrepreneur Helena Rubinstein (Russian-born, living in outback Australia for a short time before making her fortune in New York), followed the motto: “Quality’s nice, but quantity makes a show.”

Newly arrived American brides also injected a certain ‘new-world vigour’ into British social life. Many of them, including Lady Randolph Churchill (mother of Winston Churchill), were more actively interested in up-to-date interior decoration than their British sisters. So many wealthy women arrived that the annual publication Titled Americans, a directory of titled gentlemen and wealthy American women, featured a directory of “American ladies who have married foreigners of rank”.

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Lady Randolph Churchill, mother of Winston Churchill, c1880. (Photo by Hulton Archive/Getty Images)

Not all the lavish spending undertaken by some of their husbands was welcomed, however. Sometimes the male partners spent so much of the family’s money that the newly acquired American relatives felt they had to intervene. For instance, Boni de Castellane, the French belle époque taste-maker and trendsetter, held legendarily fabulous parties, featuring nine miles of specially commissioned red carpets, gardens in which Nubian men in turbans walked jaguars and panthers, and precious antiques and art works in abundance. Boni’s American father-in-law once innocently enquired why Boni was purchasing so many ‘second-hand’ objects from the 18th century. Boni explained in his memoir: “I preferred to exist in a dream world of past splendour, pretty women and interesting people.”

In the 20th century, America introduced many of the innovations that led to a more democratic notion of luxury. Central heating in houses, well-insulated vehicles, nylon stockings, synthetic underwear and mass-produced food all transformed every day understandings of that which went beyond necessity. Yet for the world that existed before the devastation of the First World War, it was old luxury, often bankrolled by American fortunes, that set the standards and dreams of an epoch.

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Peter McNeil and Giorgio Riello are the authors of Luxury: A Rich History, published by Oxford University Press.